PRIME MINISTER Julia Gillard has launched a broadside against Tony Abbott's opposition for stirring up fear and she has expressed disgust over the Health Services Union debacle.

Speaking at the ACTU Congress in Sydney this afternoon, Ms Gillard made a stirring speech to around 1000 union delegates, telling them Mr Abbott was running a massive fear campaign.

"Australians have been screamed at by the opposition for more than a year and told they need to be very afraid," she said.

Prime Minister Julia Gillard. Photo: Penny Bradfield

Ms Gillard said she was from "the party of realism", and acknowledged that these were not easy days for the Labor movement or the Labor Party.

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And she said she was aware her government was not popular. "I can read the opinion polls and I am under no illusions at the depths of the challenges [we face]."

But her government had made real achievements, she said, pointing to carbon pricing, increases in aged pensions, and the national broadband network as key policies Labor had shepherded through.

Ms Gillard confronted the troubles around the Health Services Union, saying they were tarnishing the reputation of the Australian union movement badly, and this distressed her.

"I know it distresses you the way it distresses me, that the very poor conduct of one union risks tarnishing that reputation," she said. "That dismays you and it dismays me as well."

"Members have been let down very badly - instead of the sole focus of those union officials being on those members," Ms Gillard said.

"That disgusts me and I know that it disgusts you too."

She roused delegates at the conference to remember the dumped WorkChoices policy that the Labor government had removed.

"We dumped WorkChoices because it was dumping on working people," she said.

She said that her government had "eradicated the days of fear in workplaces that Mr Abbott and his friends brought".

"We have moved from Mr Abbott's days of fear at work to days of decency ... by protecting rights at work," she said.

Labor was not driven by the polls, Ms Gillard said, but by the interests of working people.

"We do not do the things we do because we are looking for a headline or a poll bounce," she said.

She said there was nothing to fear from carbon pricing, but that she understood the serious cost-of-living pressures so many Australians were under.

"[Those people] are wondering whether the government understands the pressure that they are under," she said. "We do."

And she said many Australians were concerned about the minority parliament, but she said it was working.

"This minority parliament, so unusual in Australian history, is working. ... This minority parliament has been working through the too-hard basket for the nation," she said, listing the mining tax, the separation of Telstra, and welfare-to-work policies as key achievements.

"What you do," she told the union members gathered at the conference, "makes a difference to working people and their families".

Ms Gillard said she would devote "all of my energy into the next 500 days as we move towards the election campaign" to fight for the Labor cause.

"As your Prime Minister, I will move the Australian people from these days of fear to days of hope," she said.